Browse by: "2009"

An epidemic of obesity has been developing in virtually all OECD countries over the last 30 years. Existing evidence provides strong suggestions that such epidemic has affected certain social groups more than others. In particular, education appears to be associated with a lower likelihood of obesity, especially among women. A range of analyses of health survey data from Australia, Canada, England and Korea were undertaken with the aim of exploring the relationship between education and obesity. The findings of these analyses show a broadly linear relationship between the number of years spent in full-time education and the probability of obesity, with most educated individuals displaying lower rates of the condition (the only exception being men in Korea). This suggests that marginal returns to education, in terms of reduction in obesity rates, are approximately constant throughout the education spectrum. The findings obtained confirm that the education gradient in obesity is stronger in women than in men. Differences between genders are minor in Australia and Canada, more pronounced in England and major in Korea. The causal nature of the link between education and obesity has not yet been proven with certainty; however, using data from France we were able to ascertain that the direction of causality appears to run mostly from education to obesity, as the strength of the association is only minimally affected when accounting for reduced educational opportunities for those who are obese in young age. Most of the effect of education on obesity is direct. Small components of the overall effect of education on obesity are mediated by an improved socio-economic status linked to higher levels of education, and by a higher level of education of other family members, associated with an individual’s own level of education. The positive effect of education on obesity is likely to be determined by at least three factors: (a) greater access to health-related information and improved ability to handle such information; (b) clearer perception of the risks associated with lifestyle choices; and, (c) improved self-control and consistency of preferences over time. However, it is not just the absolute level of education achieved by an individual that matters, but also how such level of education compares with that of the individual’s peers. The higher the individual’s education relative to his or her peers’, the lower is the probability of the individual being obese.

The aim of this report is to assist policy makers in providing an overview of how broadband physical coverage and availability can be measured. It first summarises what data are available from official and non-official sources. The approach taken by the report is to consider coverage and availability related to different types of technologies. These include Digital Subscriber Line (DSL or xDSL), cable networks (i.e. cable modem), Fibre to the Premises (i.e. FTTH/B for homes and businesses), 3G (including WCDMA and CDMA-2000), satellite and WiMAX technologies. This is because every technology capable of providing high speed Internet access involves specific issues when measuring coverage and availability. Accordingly, categorisation by technology is the most consistent way to approach this task. For every broadband technology, the available indicators will be presented, and this report discusses to what extent they are comparable. This report does not address metrics on the actual take-up of broadband services or penetration rates which are based on different measures and for which cross-country data are much more consistent. The report is aimed at providing information on the advantages and pitfalls of existing indicators used to measure broadband coverage. There is not necessarily a single indicator which should be used when assessing broadband coverage since this depends on what measures policy makers require: for example measuring the digital divide which may exist in a country, measuring the availability of broadband access for business, measuring broadband availability for residential customers, etc. There is no attempt in the paper to draw a conclusion as to the ideal indicator which should be used. However, it is important that OECD countries try to ensure a better consistency in the use of indicators to measure availability of broadband. The paper, in certain tables, lists all OECD countries even though they may be using different indicators to measure broadband coverage. The purpose in doing so is to show which indicators countries use and not to try and equate indicators that are by nature different.

This report makes a case for investment in a competitive, open-access national fibre-to-the-home network rollout based on potential spillovers in four key sectors of the economy: electricity, health, transportation and education. This research offers a new approach to evaluating the costs of building the most forward-looking network possible by evaluating what short-term cost savings (benefits) would have to be achieved in other key economic sectors to justify the investment. On average, a cost savings of between 0.5% and 1.5% in each of the four sectors over ten years resulting directly from the new broadband network platform could justify the cost of building a national point-to-point, fibre-to-the-home network.

The crisis that originated in mid-2007 in the United States and deepened in September 2008 is the largest peace-time disruption of financial markets since the Great Depression. It was triggered by a number of factors, namely the large amount of lending to subprime borrowers, the expansion of securitisation resulting in a disconnect between loan originators and final investors, the questionable assessments of credit rating agencies and the unprecedented resort to off-balance sheet vehicles. These developments took place during a traditional credit boom and reinforced the skyrocketing of asset prices, erosion of lending standards and under-pricing of risk. The crisis had serious repercussions worldwide, particularly in Europe, given the global nature of financial markets. This paper begins by considering why the Japanese banking system was initially relatively resilient to the deterioration in the global financial system, although there were some secondary effects that are discussed in the following section. The third section outlines the emergency response of the Japanese authorities to the financial crisis, including quantitative measures by the central bank and other institutions and regulatory changes by the Financial Services Agency (FSA). At the same time, the authorities have taken steps to improve the regulatory framework. The fourth section goes beyond the crisis to consider policies to boost chronically low profitability in the banking sector. Measures to promote efficiency in the financial sector by upgrading capital markets and improving the range and quality of financial products are discussed in the following section.

Japan, a relatively energy-efficient country, has been active in combating climate change. Under the Kyoto Protocol, Japan is committed to reducing greenhouse gas emissions by 6% relative to 1990 over the period 2008-12. As of 2007, however, its emissions were up by 9%. Japan has relied primarily on voluntary measures, which are monitored by the government, without binding commitments or price signals on carbon. It is essential to improve the policy framework to achieve its ambitious longer-term target of a 60% to 80% emission reduction by 2050 in a cost-effective manner. Japan should shift from voluntary measures to market-based instruments, notably a mandatory and comprehensive emission trading scheme, supplemented if necessary, by carbon taxes in areas not covered by trading, which minimise abatement costs and promote innovation to reduce emissions. Trading schemes should be linked to those in other countries, while expanding Japan’s use of a well-functioning Clean Development Mechanism. Continued public support for R&D in emission reduction technology, particularly in basic research, is important.

Japan’s health-care system has provided universal access to care and contributed to the outstanding health status of the Japanese. Public spending has been kept below the OECD average through high co-payment rates and reductions in medical fees. However, with continued upward pressure on expenditure, in part due to rapid population ageing, reforms are needed to limit spending increases through greater efficiency, while improving quality. It is essential to shift long-term care out of hospitals, reform the pricing mechanism away from pay-for-visit, increase the use of generic drugs, encourage healthy ageing and promote restructuring in the hospital sector. Quality should be improved by increasing the availability of effective new drugs and medical devices. In funding spending increases, it is important to limit the share borne by employees to avoid negative effects on the labour market. Japan may need to allow more mixed billing to enhance access to some advanced medical treatments.

Crude oil prices have trended up since the end of the 1990s, peaking at a historic high in mid-2008 that was followed by a steep price correction with a subsequent rebound. This paper considers major forces behind the evolution of the oil price, using a simple model of supply and demand elasticities as a benchmark, highlights implications for inflation and economic activity and draws some conclusions for macroeconomic policy. The analysis suggests that the run-up in crude oil prices since 2003 was due to both vigorous oil demand growth by emerging markets and, from the middle of the decade onward, a weaker than expected oil supply response to rising prices. Prices are unlikely to fall back to levels seen in the first years of the decade either over the short or medium term.

Prices for many goods and services in Belgium are higher than in other countries, reflecting generally weak competitive pressures. The government has recently introduced several reforms to strengthen the competition policy framework. Nevertheless, to reap the full benefits of competitive markets, past reforms should be complemented with a number of further measures. The powers of the Competition Authority can still be enhanced. Its effective degree of independence, substantially improved in the recent reform, and its accountability should be monitored in order to assess whether further measures in this direction are needed. In the retail sector competition-restricting regulations still protect existing companies against new entry and inhibit the diffusion of new business models and technologies. The reform efforts in the network sectors remain patchy. In the energy and telecommunication sectors the main issues are the dominant positions of the incumbents and the failure of network sector regulators to introduce a level playing field in order to allow new entry and expansion of competitors. In other sectors, such as postal services and rail transport, major steps towards liberalisation are still to come. Overall, sectoral regulators will need more independence and powers in order to tackle uncompetitive behaviour of the incumbents, while better communication between the regulatory authorities is necessary. These steps should help to secure the necessary basis for bringing productivity growth in line with best performance.

Cities represent a challenge and an opportunity for climate change policy. As the hubs of economic activity, cities generate the bulk of GHG emissions and are thus important to mitigation strategies. Urban planning will shape future trends and the concentration of population, socio-economic activity, poverty and infrastructure in urban areas translates into particular vulnerability to increased climate hazards. City governments and urban stakeholders will therefore be essential in the design and delivery of cost-effective adaptation policies. Further, by empowering local governments, national policies could leverage existing local experiments, accelerate policy responses, foster resource mobilization and engage local stakeholders. This paper presents a framework for multilevel governance, showing that advancing governance of climate change across all levels of government and relevant stakeholders is crucial to avoid policy gaps between local action plans and national policy frameworks (vertical integration) and to encourage cross-scale learning between relevant departments or institutions in local and regional governments (horizontal dimension). Vertical and horizontal integration allows two-way benefits: locally-led or bottom-up where local initiatives influence national action and nationally-led or top-down where enabling frameworks empower local players. The most promising frameworks combine the two into hybrid models of policy dialogue where the lessons learnt are used to modify and fine-tune enabling frameworks and disseminated horizontally, achieving more efficient local implementation of climate strategies.

This survey summarises the insights that the new literature based on subjective data has shed on the issue of income inequality and income comparisons. It reviews the various channels that relate income distribution and subjective well-being. It considers the welfare effect of income gaps in general, both in terms of the difference between individual income and the income of some relevant other, and with regard to generic income distribution. Concerning income comparisons, the general lesson is that it is useful to distinguish status effects from signal effects: income comparisons hurt, but they may also increase life satisfaction when they mean good news; this is all the more likely as the reference group is made of people who most likely share a common destiny. Concerning income distribution in general, the relationship with subjective well-being is generally found to be negative, with higher societal inequality being associated with lower subjective well-being. There are many possible pathways which may lie behind such an empirical finding. The first type of aversion to income inequality derives from self-centred motives, such as risk-aversion and prospects for upward mobility (POUM). Both stem from a perception of the income distribution as a ladder that one risks falling from or has a chance to climb. Attitudes to inequality are also sometimes found to be based on other-regarding preferences such as fairness and reciprocity, which are generally independent of the income position of the individual himself. An important point is that subjective attitudes are the joint output of preferences and beliefs concerning income distribution in society. The demand for redistribution is higher whenever people have strong preferences for equal outcomes or opportunities but believe that in the society in which they live, outcomes or opportunities are actually not equal. As illustrated by several studies, preferences and beliefs concerning income distribution are context dependent and are thus heterogeneous across countries and groups of the population.

Trade can be a powerful engine for economic growth, poverty reduction, and development. However, harnessing the power of trade is often difficult for developing countries, particularly the least developed countries, because of supply-side domestic constraints (lack of trade-related infrastructure and capacity). The Aid for Trade Initiative was launched to address these constraints. This paper sets forth strategies to identify the most binding constraints to trade expansion so countries and donors can channel resources toward reforms and projects that have the largest effect. It shows that the four most common objectives of aid-for-trade projects (increasing trade, diversifying exports, maximizing the linkages with the domestic economy, and increasing adjustment capacity) have the potential to boost growth and reduce poverty in developing countries. However, the potential of trade may not be realized as developing countries often face binding constraints that prevent them from turning trade opportunities into trade, and trade into growth. First, they face difficulties turning trade opportunities into trade flows because of capacity constraints and lack of adequate trade-related infrastructure. Second, some domestic constraints choke the impact of trade expansion on economic growth. The paper focuses on the first set of constraints and presents various diagnostic tools available to identify them. These tools often pinpoint a long list of constraints. As all constraints cannot be addressed simultaneously, there is a need to identify the most binding ones in order to prioritize reforms. The paper suggests combining the different diagnostic tools in an appropriate framework to achieve this prioritization. An adaptation of the growth diagnostics— originally developed by Hausmann et al. (2005) for guiding growth strategies—can be such a framework. By shifting the focus from growth to trade, this framework can be readily adapted by local authorities and development practitioners.

The purpose of this article is to discuss how policies can affect investment in tertiary education in ways that would eliminate some of the perceived shortcomings of existing systems, while preserving or (preferably) enhancing equality of access to higher education.
To this end, the analysis focuses on the institutional set-up of tertiary education that provides incentives for supplying quality educational services; the private returns from higher education which act to attract prospective students; and, individual funding mechanisms to help overcome the liquidity constraints that may restrict participation in higher education. These mechanisms should also be designed so as to prevent uncertainty about future incomes from unduly deterring investment in tertiary studies by risk-averse individuals.

Joaquim Oliveira Martins, Romina Boarini, Hubert Strauss and Christine de la Maisonneuve

There has been a growing interest in the environmental impact of aviation, both in terms of noise and aircraft engine emissions. Discussions have included both mitigation measures and methods of internalisation of these environmental costs also described as the principle of polluter pays. This paper focuses on CO2 emissions from aircraft engines, which have both local and climate change implications, and where the emphasis of most recent discussions has centred. These have taken place at an international, regional and local level.

Definitions of high speed rail (HSR) differ, but a common one is rail systems which are designed for a maximum speed in excess of 250 kph (UIC, 2008). These speeds invariably involve the construction of new track, although trains used on them can also use existing tracks at reduced speeds. A number of countries have upgraded existing track for higher speed, with tilting technology on routes with a lot of curves. However such trains do not normally run at speeds above 200 km p h. Their rationale is to upgrade services at relatively low cost in countries which have sufficient capacity to cope with increased divergence of speeds on routes shared with all forms of traffic. Most of the countries which adopted this strategy initially, such as Britain and Sweden, are now considering building HSR. The only form of totally new technology that has come close to being implemented is maglev.

This paper reviews the potential benefits from separating cars and trucks onto different lanes or roads while treating road infrastructure as given. U.S. studies of mixed traffic operations, lane restrictions and differential speed limits do not provide consistent evidence whether separating cars and trucks either facilitates traffic flows or reduces accident rates. Analysis with an economic model reveals that the potential benefits depend on the relative volumes of cars and trucks, capacity indivisibilities and the impedance and safety hazard that each vehicle type imposes. Differentiated tolls can support efficient allocations of cars and trucks between lanes. Lane access restrictions are much more limited in effectiveness. Toll lanes that are dedicated to either cars or trucks are a potentially attractive hybrid policy. Intelligent Transportation Systems (ITS) technology can help to improve safety and travel time reliability, and help drivers select between tolled and untolled routes.

The concept of the general purpose (GP) lane has dominated modern highway thinking and practice in OECD countries, especially for limited-access highways such as inter-city motorways and urban expressways, whether tolled or non-tolled. This paper raises the question of whether, in some circumstances, specialized lanes for light vehicles (cars, vans and pickup trucks) and heavy vehicles (generally more than two axles) might be cost-effective.

This report has been prepared as part of the Improving Social Inclusion at the Local Level through the Social Economy (CFE/LEED (2008) 9/REV1) project in the framework of the Forum on Social Innovations. A team of OECD experts visited Poland in June 2009 for a five-day study visit, to examine the role, both real and potential, of the social economy, and the support which could be given to the social economy to allow it to fulfil its potential. Meetings were held with representatives from the voivodeships of Malopolskie, Mazowieckie and Swietokrzyskie. This report is based significantly on the available statistics and on material gathered from the study visit, as well as research conducted both prior to, and after, the study visit.

Transport, especially public transport has been at the centre of professional attention from time to time. Although the effect of transport innovation shortly appears and it works high effectively in public transport (as you think of the innovation of bus transport and its dynamic progression) the attention is not due to these results, but due to problems of public transport and to strains in its social contradictions. (Sometimes the transport innovation starts already in public transport sector system, for example innovation of subway and high speed train.) Economic crisis especially highlights social contradictions, when the market is decreasing and enterprises are struggling to survive or to hold monopoly status. New enterprises could go on the market or the existing ones could stay in competition only if they are able to influence and convince passengers to choose them “by getting on”. The third that benefits is often the individual transport, and behind the automobile industry with extended power and influence. My hypothesis is that public transport sector is economically very different to classical categories of market sector, while personal utility and real value do not determine the whole market (included supplies and demands) but the phenomena of pseudo market does it. The sustainability of public transport does not depend on the individual in the sense of passenger, but on the community and on the options of common weal of it. The Institution of Transport Sciences ((KTI)), which celebrated its 70th anniversary in 2008, has been focusing on the market of public transport in the last 8 years, because strain of the market has been realized. The classical orientation of the institute, which was automobile transport and road research, has been widened with railway transport, transport policy and economics research.

The future of interurban public transport will be significantly affected by public sector decisions concerning investment in infrastructure, particularly the construction of new high-speed rail lines in medium-distance corridors where cars, buses, airplanes and conventional trains are the competing modes of transport. The distribution of traffic between the alternative modes of transport depends on the generalized prices, which fundamentally consist of costs, time and government’s pricing decisions. High-speed rail investment, financed by national governments and supranational institutions such as the European Union (EU), has drastically changed the previous equilibrium in the affected corridors. This paper discusses the economic rationale for allocating public money to the construction of high-speed rail infrastructure and how the present institutional design affects the selection of projects by national and regional governments, with deep long-term effects in these corridors and beyond.

This paper addresses the advocacy role that SEA can strategically play towards more sustainable and environmental decision-making and how this can be achieved. It discusses the required conditions for this performance and also the frustrations of SEA when such conditions are absent or insufficient. The paper shares the experience with the case of an SEA on the strategic decision on the location of the new international airport in Lisbon, particularly with respect to how SEA made a difference to infrastructure development decisions and the conditions that were met to make it possible.